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After months of searching, planning and preparing, you’ve found your first dream home and it’s time for the next step.
You’re going to make an offer!
And that is immediately a very exciting and very important step. Because in advance, of course, you have to see what you can offer, so that you won’t be told afterwards that you can’t get the financing and therefore miss out.
And there is another very nice option these days, where you can offer with more security, because you have a pre-checked mortgage where the financing is already pretty much in place. We’ll discuss this option later in this blog.
First you’re going to see what the asking price is, whether there is a lot of interest in the house, how long the house has been for sale and whether you might need to overbid. And do you or do you not take a buying agent.
These are all choices you make that can affect the outcome of your offer and whether or not you buy the house.
A well thought out bid
But how do you come up with a well thought out bid that is also taken seriously?
A tricky question. Because bidding on a house is about so much more than the right price.
But don’t worry. With the right preparation, bidding strategy and possibly a good real estate agent, the chances of you being able to buy your first dream home have increased a lot.
Bidding on a house usually starts with the bidding strategy. This is very important, because once you fall in love with a home, it is usually difficult to remain objective. And before you know it, you pay too much. Or you bet too low, causing you to lose the house.
Therefore, it remains an exciting and often nerve-racking “game.”
So with a good bidding strategy, you can avoid this. The bidding strategy can vary from house to house and depends on many factors, such as the market, the seller’s situation and your own.
Bid strategy
To make a thoughtful offer, first determine for yourself the room for negotiation. You set your ideal and your maximum price. In doing so, it is important to know what the house is worth and what your own maximum borrowing capacity is.
A buying agent can help you with this; he or she knows the local housing market, understands the latest price trends, and so can properly determine the fair value of a home.
But if you’d rather go out and bid yourself, that’s totally fine too, of course. You will save costs that can be put to good use for other things later on.
Furthermore, it is important to think carefully about the conditions you attach to your bid.
Indeed, in addition to price, these can also play a decisive role for the seller in choosing the winning bid. Consider inspections, financing, structural inspection, completion, and so on.
So an offer ultimately consists of a sum of money and, as described above, any additional conditions. It is up to the seller to decide whether or not to award the property. This is because the seller does not have to award the property to the highest bidder.
Once the seller and buyer have reached a verbal agreement, it is recorded in a sales contract. And if the buyer is a consumer, there is a written requirement in this case. That is, there is only a legally valid purchase agreement when the purchase agreement is signed (digitally) by the seller and buyer.
Bid forms
The bidding procedure is determined by the seller in consultation with the selling broker. The seller may change to a different bidding procedure during the sale if it suits him/her better.
Therefore, there are several ways to bid on a house:
- Negotiate
In this form of bidding, an interested party makes an opening offer, either verbally or in writing.
If you choose to make an offer verbally, it is wise to always confirm it in writing. Once you receive a counteroffer, you are in negotiation.
As a bidder, you can also choose to make a final offer immediately, to which you want a response from the seller by a certain date and time.
- Sale by tender
If the seller chooses to sell by tender, then a bidder can make a bid before a certain closing date. You submit this to the selling broker or notary before a certain date and time. For example, in a (sealed) envelope, via e-mail or an online bidding system.
Bids are discussed only with the seller. The seller then decides if and to whom the home will be sold. All bidders are told whether or not the home has been awarded to them.
Different guidelines, ground rules and conditions often come into play. Always check if this is the case.
- Auction
In an auction, all participants see what bids are made. You usually cannot set conditions as a bidder in an auction.
- Online bidding system
The seller can choose to use an online bidding system. In this you can enter your bid. A system commonly used by realtors is Move.com.
Mortgage2Go
We hope you now have a good idea of the bidding process and all that is involved.
So, as discussed in the first paragraph, there is now a possibility with more security to stay ahead of the competition. And is this overstrained market is not an unnecessary luxury.
Do you have certainty about what you can borrow maximum for a mortgage and want to get the financing just about right before you start house hunting?
Then Mortgage2Go offers the solution.
With a pre-checked mortgage, your financing is already virtually complete and you can be sure you can afford your dream home. Within two business days of your accepted offer, your financing is then complete and finally approved!
To take advantage of the pre-qualified mortgage, however, you will need to work with a Mortgage2Go affiliated purchasing agent.
Start an application quickly and see if you qualify.
